1. Meaning and Definition of Demand
In economics, demand means the quantity of a good or service that a person is willing and able to buy at different prices during a given period.
Demand is not just a wish to buy something. A person must also have enough money and be ready to spend it.
Example: You want to buy a chocolate that costs ₹20. You have enough money and are ready to buy it. This is demand.
But if you want to buy an expensive phone and do not have enough money, it is only a wish, not effective demand.
Demand has three important points:
- Willingness: The person wants to buy the product.
- Ability: The person has enough money to buy it.
- Price and time: Demand is measured at different prices during a particular period, such as a week or a month.
2. What Is Individual Demand?
Individual demand means the quantity of a product that one person is willing and able to buy at different prices during a given period.
Example: Rahul buys coffee every week.
- When one cup costs ₹50, Rahul buys 2 cups.
- When one cup costs ₹30, Rahul buys 5 cups.
This is Rahul’s individual demand for coffee because we are considering only one person.
3. What Is Market Demand?
Market demand means the total quantity of a product that all consumers in a market are willing and able to buy at different prices during a given period.
Example: Imagine that three people buy coffee in a market.
- Rahul buys 2 cups.
- Priya buys 3 cups.
- Aman buys 4 cups.
To calculate market demand, we add their quantities:
Therefore, the total market demand is 9 cups of coffee.
Market demand includes the combined demand of all consumers, not just one person.
4. Difference Between Individual Demand and Market Demand
| Individual Demand | Market Demand |
|---|---|
| It is the demand of one person. | It is the total demand of all consumers. |
| It considers a single consumer. | It considers all consumers in the market. |
| Example: Rahul buys 2 cups of coffee. | Example: Rahul, Priya and Aman together buy 9 cups. |
| It shows one person’s buying behaviour. | It shows the combined buying behaviour of consumers. |
5. Quick Revision
- Demand: The quantity of a product a person is willing and able to buy at different prices during a given period.
- Individual demand: The demand of one consumer.
- Market demand: The total demand of all consumers in the market.
Remember this formula:
\[ \boxed{\text{Market Demand}=\text{Sum of Individual Demands}} \]
Exam tip: For a complete answer, write the definition, explain both types of demand with examples, and finish with the difference table.